US stocks lost steam Wednesday afternoon and ended in the red after an initial rally.
It has been a few volatile days in the market and clearly the volatility isn’t behind us just yet. Beyond the newly identified Omicron variant, the first case of which has been identified in the United States, investors can also worry about Washington’s gridlock over the debt ceiling, as well as a looming government shutdown if stopgap funding isn’t agreed on.
Smaller firms and lawmakers alike have put pressure on banks to get rid of overdraft fees — and now, the first top-ten bank has committed to doing so.
Whoops, so much for that. The Dow and Nasdaq Composite have both turned red.
The market has run out of juice a little this afternoon. All three major indexes have come off their highs by quite a bit.
To say that the market has been choppy lately would be a ridiculous understatement. Ever since the identification of the Omicron variant, stocks have been a hot mess of a rollercoaster.
But per usual, that doesn't mean you shouldn't invest in them — just don't look at your accounts on the rockier days, one expert says.
"When you invest in equities, you invest for the long haul. You've got to keep that mindset," said Tony DeSpirito, chief investment officer of BlackRock's US fundamental equities and the portfolio manager of the BlackRock Equity Dividend Fund.
"I've been recommending balance, more cyclical, more stable sectors," he said, pointing at energy and financials, though he's also bullish on the non-cyclical healthcare sector.
Federal Reserve Chairman Jerome Powell surprised investors and lawmakers yesterday when he said the central bank might roll off its pandemic stimulus program sooner than expected.
But what if it wasn't just Powell talking?
Greg Valliere, chief US policy strategist at AGF Investments, suspects that when Powell went to the White House to talk to President Joe Biden about his renomination for a second term at the Fed, the President asked him for help in managing the nation's high inflation.
Business Roundtable CEO Joshua Bolten acknowledged on Wednesday the Omicron coronavirus variant has the potential to disrupt the economic recovery but said it’s too early to say for sure.
“If it does turn out to be as dramatic a shift as the Delta variant was, that will definitely put a damper on things,” Bolten told reporters during a press conference in Washington.
Bolten said the trade group’s CEO members are adopting the view that it’s too early to tell what the economic impact will be.
“We don’t know, because the experts don’t know. Everyone’s got fingers crossed that it’s not too bad,” Bolten said.
Despite the Omicron news, Business Roundtable CEOs still plan to convene in Washington on Thursday.
“Pretty much everyone who said they were going to show up, is showing up,” Bolten said. “We are following a very right protocol of insisting that everyone who enters the space get vaccinated and recently tested, including staff, vendors and caterers.”
Bolten added on Omicron, “It’s TBD, with a lot of people pretty concerned.”
It's lunchtime, and we have only a few minutes left before the end of the House Financial Services Committee hearing with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.
Stocks have held onto their sharp gains today, even as Powell reiterated comments from Tuesday that the Fed might wind down its pandemic stimulus sooner than expected.
"The taper need not be a disruptive event for markets," he said, adding that the central bank has telegraphed well what it is doing.
Here's a PSA from Federal Reserve Chairman Jerome Powell: Economic forecasts are no crystal ball.
But we shouldn't take this forecast as fact, Powell said.
"Inflation has been more persistent and higher than we have expected," he pointed out while testifying before the House Financial Services Committee.